Tier 1 Entrepreneur Changes 2016

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Tier 1 Entrepreneur Changes 2016

The Tier 1 Entrepreneur route is for those from outside the European Economic Union wishing to establish, join or takeover one or more business in the UK.You may be aware there are a few changes which are to be introduced to the Tier 1 Entrepreneur route and oddly enough they are not all negative, well at least not for Tier 1 Graduate Entrepreneurs.

The Migration Advisory Committee (MAC) have reviewed the Tier 1 Entrepreneur route and put forward their suggestions to the government on the changes they feel should be implemented.

What are the recommendations?

An amendment is to be implemented to the genuine entrepreneur test in order for the Secretary of State to make an assessment of any previous investment made by an applicant in to a UK business, in order to be satisfied that the investment was genuine.

  • MAC suggests that the government makes the purposes of the Tier 1 (Entrepreneur) route more clear.
  • Remove the requirement for applicants with third party funds from a UK government department or an approved seed fund to provide additional legal documentation to further validate this arrangement;
  • Industry experts should be used to carry out the genuineness test as they are better equipped to assess.
  • The investment threshold of £200,000 should still apply to those wanting to apply who do not have a third party endorsement.
  • Graduate entrepreneurs should be permitted to remain in the UK for at least 2 years to allow them to get their business operational, at present they are only given leave to remain for a year.
  • Introduce the requirement for Tier 1 entrepreneurs to regularly report back on the progress their business is making and their plans to develop the business further; this could help the government identify businesses which are genuine.

Acceptable evidence

Changes to the evidence which is acceptable for funding and investment to:

  • Clarify the restriction on applicants investing in other businesses does not apply to those which the migrant is running as self-employed or director;
  • Clarify the evidence required from applications where they have invested by way of share capital or a directors loan;
  • Making changes to the requirements to clarify evidence of continuous trading, with specific amendments to the rules concerning ownership of web domain names and the use of rolling contracts. Additional, the reference to ‘reading online’ has been removed from the Immigration rules, as this has caused confusion for applicants; and
  • Clarifying the evidence what applicants must provide to demonstrate they have created jobs at the point of extending their leave in the UK. This responds to the introduction of ‘Real Time’ PAYE reporting to HMRC and will give applications more flexibility in terms of the evidence they can provide.

The changes suggested by Migration Advisory Committee appear logical and we are sure that those wishing to use this route to enter the UK are eagerly waiting on the changes to be introduced next year.

Let’s hope the changes are positive and the UK benefits from them.

The current requirements for applying for the Tier 1 Entrepreneur visa are:

Access to at least £200,000 or £50,000 investment funds to apply for a Tier 1 (Entrepreneur) visa.

The funds must be:

  • Held in one or more regulated financial institutions
  • free to spend (‘disposable’) on business in the UK

Additionally, you as the applicant must:

  • Meet the English language requirement
  • Be able to support yourself during your stay
  • Score 95 points – check your points score
  • Be at least 16 years old

In terms of access to the funds, £50,000 is applicable to those who have valid leave to enter or remain under the one of the following categories:

  • Tier 1 Graduate Entrepreneur
  • Tier 1 Post Study Worker
  • Tier 1 General
  • Tier 4 Student

The requirements for those who are permitted to hold £50,000 are as follows:

Must have access to £50,000 investment funds from one or more of the following:

  • a UK entrepreneurial seed funding competition endorsed by UKTI
  • a UK government department making funds available for the purpose of setting up or expanding a UK business

The investment funds cannot include:

  • own money
  • money from any other third parties
  • money from a UK venture capital firm

The funds must be held in the UK if you are applying for leave to remain.

If none of the above applies, then funds of £200,000 must be held.

We are vastly experienced in Tier 1 Entrepreneur (regular and graduate) and Tier 1 Investor applications with a track record of speed and success.

Author

Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.

She is a recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.

Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals

About DavidsonMorris

As employer solutions lawyers, DavidsonMorris offers a complete and cost-effective capability to meet employers’ needs across UK immigration and employment law, HR and global mobility.

Led by Anne Morris, one of the UK’s preeminent immigration lawyers, and with rankings in The Legal 500 and Chambers & Partners, we’re a multi-disciplinary team helping organisations to meet their people objectives, while reducing legal risk and nurturing workforce relations.

Legal Disclaimer

The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct at the time of writing, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.

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